Does the tech revolution mean we can gamify insurance?

Insurance

Insurance

One of the by-products of the ongoing technological revolution is an increasingly savvy and engaged consumer. As consumers become more techno savvy they have access to a wider array of product and service offerings and are demanding a change in how organizations communicate with them. Changes in technology have fundamentally and permanently affected consumers’ expectations of service standards and altered their views of companies. This new breed of ultra-engaged customer is using social media and a host of other online tools to have conversations about brands, rather than with them.

This is especially true of the highly competitive global insurance market which, thanks to innovations such as online forums and price comparison websites, is feeling the squeeze more than ever.

This is one of the many reasons why insurers need to start emulating consumer brands in their fight to retain customer loyalty, and why in particular they should look to adopt one of the hottest trends in consumer marketing: gamification.

Gamification – or the use of traditional game mechanics to engage users outside of the traditional gaming environment – is now almost a standard technique used by brands across the retail sector. From DropBox offering customers more online storage in exchange for completing various tasks, more and more brands are using the tactics more commonly seen in video games to interact with customers.

Rewarding shoppers for buying certain products is a simple, even obvious, application of this trend. But why isn’t this concept being used more in insurance? If insurers can engage consumers by rewarding them for driving more carefully or setting their alarm when they leave the house, surely it’s a win-win situation for both parties? What techniques can insurers use to make their products more compelling to customers, and how can these mechanics ultimately help drive the bottom line?

Insurance is traditionally a necessity purchase. Consumers rarely interact with their insurer unless they either need to renew their policy or make a claim. However, consumers are now starting to wise up to the buying decisions that they are making, and many now want to understand the value they receive from services. This is having a direct effect on insurers and how they market their products and services, particularly around how they offer more value than their competitors.

There is an increasing demand for more personalized, flexible products that better reflect consumers’ personal circumstances and Insurers need to take heed of these demands and adapt product and service offerings to retain and attract these techno savvy users. Insurers need to move to a scenario where products are not only flexible enough to satisfy consumers but also engaging enough to retain their loyalty.

We’re beginning to see the green shoots of this appreciation for the new consumer in the rise of telematics. Although not strictly gamification, telematics offers insurers the chance to monitor driver behavior to more accurately assess their risk, while consumers benefit from potentially lower premiums. It is not hard to see the leap from pure telematics to a gamified form of the technology where acceleration, braking and cornering are measured and “prizes” in the form of discounts or gifts awarded for better drivers.

This technology exists now and from there it is not hard to see insurance companies begin to start partnering with commercial loyalty schemes to begin offering discounts and incentives via other purchasing decisions.

Similarly, the development and implementation of interactive technologies, for example apps, not only puts the power of instant access to information back in to the hands of the consumers, but also aids Insurers to build more accurate consumer and user profiles.

Development and presentation of these apps should be developed from an outside in perspective in that insurers would need to start thinking from a consumer’s point of view in what information they perceive to be most valuable. App development should focus on access to information, usability and simplification of traditional business models, for example the claims process, in order to attract customer downloads and interaction.

Deloitte’s 2013 Insurance Tech Trends report highlighted that in 2012, both Apple and Google Play surpassed 25 billion app downloads and that by the second quarter of 2013 the total global install base of smart phones and tablets was predicted to exceed those of PC’s.

Insurance now is more than just a transaction. Thanks to a new generation of engaged, informed consumers it is evolving into as much of a life choice as buying a car or new TV. As such, the traditional insurance product now comes with the need to ensure that it adds real value to the consumer, and not just sits as a static purchase on a yearly cycle.

Customer loyalty is the new frontline of competition for insurers, and relationships need to be managed more closely than ever to ensure that loyalty is embedded into the buying cycle from day one. Insurers need to be wary of the boundaries pertaining to inducement in their quest for brand advocacy and differentiation. However, these issues are fairly easily navigated.

The days of insurance being vendor-centric are over. The global insurance industry is now consumer-centric. The future-ready insurer needs to offer excellent customer service solutions that are as focused on engagement as they are retention. The focus has shifted from when the consumer touches the transaction to the value around that relationship.

Gamification and other similar technology-based techniques not only allow insurers to engage with consumers on a new and more personal level, they also open up new channels of communication that can ultimately be converted into both loyalty and brand advocacy.

Image: StockMonkeys.com

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